Morningstar | The Warehouse Group's Strong Online Sales Growth Likely to Trigger Network Rationalisation
The Warehouse Group dominates New Zealand's discount department store market, with the company's scale covering the breadth of the country. We are concerned about the intense competition in retail, which we expect to increase following Amazon's entry into the Australian market. We believe it is essential for retailers to embrace the online trend. We forecast most of the incremental sales growth across many categories to be captured by e-commerce, particularly in those categories to which The Warehouse Group is exposed, such as consumer electronics and apparel. However, management has formulated a sound strategy, and we expect its successful implementation to protect operating margins and to generate sustainable long-term earnings growth.The Warehouse Group is an office retailing group based in New Zealand. Co. is engaged in general retail in both the domestic small-office/home-office and small-to-medium size enterprise markets. Co. has two primary operating segments operating in the New Zealand retail sector. The operating segments are managed separately with their own management, stores and infrastructure. The Warehouse is predominantly a general merchandise and apparel retailer, with 87 stores located throughout New Zealand. The Warehouse Stationery is a stationery retailer, with 47 stores located throughout New Zealand.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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